Water Company Sues County Over New Pine Water District

The Pine Water Company has filed a lawsuit against Gila County, its Board of Supervisors and other county officials over the supervisors' approval of a new water improvement district in Pine and the developer who said he had no choice but to develop the district is firing back.

In the suit, filed Aug. 20 in Gila County Superior Court, the Pine Water Company a public service corporation regulated by the Arizona Corporation Commission maintains that formation of the new Strawberry Hollow Domestic Water Improvement District is not in the public interest.

"This is about private interests, the needs of one developer, nothing more and nothing less" said Robert Hardcastle, president of the Pine Water Company and Brooke Utilities, in a press release e-mailed to some, but not all of the Pine Water Company's customers and not to the local press.

"The company has asked the court to declare the board's actions in forming the new district invalid and to effectively prevent the new district from operating," Hardcastle said in his company's statement.

"The area served by Pine Water, which includes the Strawberry Hollow development, has been plagued by a water shortage for many years the severity of which has caused the Arizona Corporation Commission to impose new water service moratorium in the Company's service area," Hardcastle said.

The purpose of the commission's moratorium, he said, is to "ensure that new developments do not exacerbate the existing water shortage to the detriment of those already residing in the Pine area," and the new water district is "clearly the developer's attempt to pull an end-run around the (ACC's water service) moratorium."

The Pine Water Company claims about 2,000 customers and another 243 on a waiting list developed "as a result of the corporation commission's moratorium," Hardcastle said.

"By authorizing the formation of the Strawberry Hollow Domestic Water Improvement District, the county has effectively told those on the waiting list to take a back seat to this one developer. That's just not right."

Strawberry Hollow developer Loren Peterson is firing his own volleys in response to Hardcastle's claims and legal actions.

"He's in a business for profit, he lives in California, the water company is owned in California," Peterson said. "I don't know that you can say that he has the best interests of our community."

With the new water district, Peterson said he "is trying to do something to solve the water service moratorium imposed on Pine Water Company. In fact, we're trying to do Pine Water Company's job. We are presently in the process of drilling a very deep well within the boundaries of the proposed district," which, he said, "cannot count on help from the Pine Water Company."

Regarding Hardcastle's position that the new water district would be unfair to the landowners currently on the Pine Water Company waiting list, Peterson said, "Some of those ... on the list have no current intent to actually construct homes and live in Pine ... Unlike those on the list, we aren't waiting around for Pine Water Company or the ACC to say it's okay to build a house in Pine. We're finding our own water and hopefully enough to share with the residents of Pine and Strawberry."

Peterson said that prior to the creation of the proposal for the new district, he contacted Hardcastle in hopes that an agreement could be reached with the Pine Water Company to provide water to Strawberry Hollow.

"He said, 'Send me a proposal,'" Peterson said. "It seems ironic, doesn't it? He's in the business of providing water, but he didn't seem very interested. How do you send a water company a proposal for them to supply you water?

"I feel like I'm on the side of the community," the developer said. "The Pine-Strawberry Water Improvement District has a volunteer board of directors that has spent a lot of time and energy on the long-term water solution. They are going to solve the problem. A short-term return on investments and quick fixes won't solve the problem."

District One Supervisor Ron Christensen, meanwhile, dismisses the Pine Water Company's lawsuit as a matter of legal course over which the county will eventually triumph.

"There's a provision in the law that any decisions made by the board of supervisors is appealable in court, and that's what he's doing," Christensen said Monday afternoon.

"The basis of his lawsuit is that he doesn't want a water improvement district up there, even though he's unable to serve the area," the supervisor said. "But we have formed many of these in Solitude Trails, Portals Four, the Pine-Strawberry Water Improvement District and I suspect that we will prevail in this matter."

In Christensen's view, Hardcastle "isn't arguing about the legality of forming" the new water district; "He just thinks it shouldn't be there and that he should be able to provide the water yet he's supposed to provide the water to a certificated area, but he's not been doing it. So people are left to supply their own water."

According to Christensen, the creation of the new water district "has no financial effect on (Hardcastle) whatsoever, because he's not supplying the area and never has supplied the area at Strawberry Hollow. So Strawberry Hollow went out and developed its own water source."

"We'll see what happens," Christensen concluded. "It is my understanding that (Hardcastle) has already made overtures to withdraw the suit."

Hardcastle could not be reached by press time for comment on the Pine Water situation.

If the Pine Water Company suit continues, the county is due to answer it by mid-September.